,i #aaith ,,congress #b;d ,session ,h4 ,r4 #ggbi ,,in ,,the ,,house ,,of ,,representatives ,february #bf1 #bjbf,mr4 ,casten introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce ,a ,,bill ,to amend the ,federal ,power ,act to require the issuance of rules relating to shared savings frameworks for certain transmitting utilities1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,shared ,utility ,rewards for ,grid ,efficiency ,act of #bjbf or the ,,surge ,act of #bjbf4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,sec4 #b4 ,amendments to the ,federal ,power ,act4,sec4 #c4 ,shared savings framework rule for transmitting utilities subject to ,federal ,energy ,regulatory ,commission jurisdiction4,sec4 #d4 ,guidance for electric utilities not subject to ,federal ,energy ,regulatory ,commission jurisdiction4,sec4 #e4 ,grant program for ,state regulatory authorities4,sec4 #f4 ,studies on effects of certain rate treatments and alternative frameworks4,sec4 #g4 ,definitions4 #b4 ,amendments to the ,federal ,power ,act ,section #bai of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbds7 is amended-- 7#a7 in subsection 7a7-- 7,a7 by striking ,not later than #a year after the date of enactment of this section1 the ,commission shall establish1 by rule1 and inserting ,the ,commission shall issue such rules as may be necessary to establish2 and 7,b7 by inserting 1 improving efficiency1 after ensuring reliability2 7#b7 in subsection 7b7-- 7,a7 in the matter preceding paragraph 7#a71 by striking ,the rule shall and inserting ,the rules issued under this section shall2 7,b7 in paragraph 7#a71 by inserting 1 and operational improvements for1 after capital investment in2 7,c7 in paragraph 7#b7-- 7i7 by inserting or other incentive mechanism after return on equity2 and 7ii7 by inserting or incentivizes improvements that increase the efficiency of the transmission of electric energy and reduce costs for consumers after 7including related transmission technologies72 7,d7 in paragraph 7#c71 by inserting 1 including performance-based measures1 after other measures2 and 7,e7 in paragraph 7#d7-- 7i7 in subparagraph 7,a71 by striking 2 and and inserting a semicolon2 7ii7 in subparagraph 7,b71 by striking the period and inserting 2 and2 and 7iii7 by adding at the end the following new subparagraph3 7,c7 amounts determined pursuant to shared savings frameworks or other incentive mechanisms prescribed in such rules4 2 and 7#c7 in subsection 7c71 by striking ,in the rule and inserting ,in a rule4 #c4 ,rulemaking on shared savings framework for transmitting utilities subject to ,federal ,energy ,regulatory ,commission jurisdiction 7a7 ,rule required ,not later than one year after the date of the enactment of this ,act1 the ,commission shall issue a final rule under section #bai7;b77#c7 of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbds7b77#c771 as amended by section #b1 that establishes a framework under which a covered transmitting utility may recover a portion of verified cost savings attributable to a qualifying action of such transmitting utility as an incentive 7in this subsection referred to as the shared savings framework74 7b7 ,methodologies ,the ,commission shall develop and include in the rule under subsection 7a7 standardized methodologies1 applicable across similarly situated transmission segments1 as follows3 7#a7 ,baseline performance methodologies ,methodologies1 developed in consultation with the ,secretary1 for covered transmitting utilities to determine the annual baseline performance of transmission facilities or transmission segments absent qualifying actions-- 7,a7 by measuring the baseline performance of such a transmission facility or transmission segment-- 7i7 through the actual amount of electrical energy entering and leaving such facility or segment 7commonly referred to as direct metering72 or 7ii7 if the method under clause 7i7 is not feasible1 through an estimation of such amount consistent with modeling methodologies prescribed by the ,commission2 and 7,b7 by normalizing data to ensure such baseline performance accounts for variability in exogenous factors determined by the ,commission1 such as variability in-- 7i7 weather2 7ii7 demand over time2 7iii7 upgrades1 interconnections1 or operational changes made by other utilities1 ,independent ,system ,operators or ,regional ,transmission ,organizations1 or other entities determined relevant by the ,commission2 or 7iv7 other conditions affecting demand or generation4 7#b7 ,methodologies relating to cost savings ,methodologies for covered transmitting utilities to estimate and calculate1 and for independent evaluators to verify1 the cost savings attributable to qualifying actions under the shared savings framework1 taking into account-- 7,a7 the baseline performance of any transmission facility or transmission segment with respect to which a qualifying action is conducted2 and 7,b7 price proxies1 determined according to a methodology prescribed by the ,commission1 for the value of electric energy transmitted 7which may include1 for a region managed by an ,independent ,system ,operator or ,regional ,transmission ,organization1 the locational marginal price corresponding to the location on the electric grid where an injection or withdrawal of power is modeled 7commonly referred to as a pricing node774 7#c7 ,methodologies relating to recoverable percentage and rate recovery timeline 7,a7 ,in general ,methodologies for covered transmitting utilities to determine1 taking into account the factors described in subparagraph 7,b71 the following3 7i7 ,the total percentage of cost savings attributable to a qualifying action that such a utility may recover as an incentive under the shared savings framework1 which may not be less than #aj percent or greater than #fj percent of such total attributable cost savings 7in this section referred to as the recoverable percentage of such savings74 7ii7 ,the period of time during which such a utility may recover amounts as an incentive for such an action1 which may not be shorter than a #b-year period or longer than a #e-year period 7in this section referred to as the rate recovery timeline for such action74 7,b7 ,factors ,the factors described in this subparagraph are the following3 7i7 ,the extent of financial or operational risk to be assumed by a covered transmitting utility in conducting a qualifying action4 7ii7 ,the baseline performance for transmission facilities or transmission segments with respect to which such action is to be conducted4 7iii7 ,the replicability or demonstration value of such action4 7iv7 ,the duration of cost savings predicted to result from such action and whether such cost savings will remain consistent over such duration4 7v7 ,the extent to which such action is expected to result in additional benefits1 such as improvements to the resilience or the reliable operation of the bulk-power system1 reductions to transmission congestion1 or reductions to greenhouse gas emissions4 7vi7 ,such other factors as the ,commission may determine relevant to ensure the incentive is performance-based1 transparent1 and cost-effective4 7c7 ,initial filing required ,to be considered for an incentive under the shared savings framework for the conduct of a qualifying action1 a covered transmitting utility shall submit to the ,commission an initial filing1 the contents of which shall be verified by an independent evaluator determined appropriate by the ,commission1 that includes the following3 7#a7 ,an identification of the baseline performance of any transmission facility or transmission segment with respect to which such action is to be conducted for the one-year period preceding the date on which such conduct is to be commenced1 determined by such utility pursuant to an applicable methodology under subsection 7b77#a7 7including the data underlying such calculation74 7#b7 ,a description of such action1 including an analysis of improvements expected to result from such action4 7#c7 ,the rate recovery timeline for such action and the recoverable percentage of cost savings attributable to such action1 determined pursuant to an applicable methodology under subsection 7b77#c74 7#d7 ,an estimate1 developed pursuant to an applicable methodology under subsection 7b77#b71 of the cost savings to result from such action for-- 7,a7 the one-year period beginning on the date on which the conduct of such action commences2 and 7,b7 the duration of the rate recovery timeline for such action4 7#e7 ,a claim for #ej percent of the recoverable percentage of cost savings estimated under paragraph 7#d77;,a74 7#f7 ,an agreement by such utility to file with the ,commission the annual reports required under subsection 7d71 the contents of which shall be verified by an independent evaluator determined appropriate by the ,commission4 7d7 ,annual reporting required ,beginning one year after the date on which a covered transmitting utility submits an initial filing for a qualifying action under subsection 7c71 and on an annual basis thereafter until the end of the rate recovery timeline for such action determined under paragraph 7#c7 of such subsection or until such action no longer results in cost savings1 whichever occurs first1 such utility shall file with the ,commission a report containing1 with respect to the qualifying action of such utility1 the following3 7#a7 ,data on the performance during the preceding year of any transmission facility or transmission segment with respect to which such action was conducted1 and a comparison of such performance to the baseline performance of that transmission facility or transmission segment determined pursuant to an applicable methodology under subsection 7b77#a7 for such year4 7#b7 ,the actual cost savings attributable to the qualifying action for the preceding year1 calculated pursuant to an applicable methodology under subsection 7b77#b74 7#c7 ,if such utility expects cost savings to result from the qualifying action during the following year1 an estimate1 developed pursuant to an applicable methodology under subsection 7b77#b71 of the cost savings for such following year4 7#d7 ,a claim for the following3 7,a7 ,an amount that is the recoverable percentage of the actual cost savings for the preceding year calculated under paragraph 7#b7 minus any amount previously recovered based on an estimate of cost savings for such year under subsection 7e77#a7 or subsection 7e77#b77;,b71 as the case may be4 7,b7 ,if the report includes an estimate of cost savings for the following year under paragraph 7#c71 an amount that is #ej percent of the recoverable percentage of such estimated cost savings4 7#e7 ,if such utility finds that the total amount recovered for a year under subsection 7e7 exceeds the amount equal to the total recoverable percentage of the actual cost savings for that year under paragraph 7#b71 an identification of the excess amount4 7e7 ,recovery mechanism 7#a7 ,rate adjustment based on initial filing ,not later than #fj days after receiving an initial filing of a covered transmitting utility under subsection 7c71 the ,commission shall provide to such utility a rate adjustment under which such utility may recover the amount claimed under subsection 7c77#e74 7#b7 ,rate adjustment based on annual reports ,not later than #fj days after receiving an annual report of a covered transmitting utility under subsection 7d71 the ,commission shall provide to such utility a rate adjustment under which-- 7,a7 subject to paragraph 7#c71 such utility may recover the amount claimed under subsection 7d77#d77;,a72 and 7,b7 if the report included a claim under subsection 7d77#d77;,b71 such utility may recover the amount so claimed4 7#c7 ,reconciliation ,if a utility identifies an excess amount under subsection 7d77#e71 or the ,commission determines the information reported for that year under subsection 7d7 is insufficient for purposes of this subsection1 the ,commission shall credit the difference to ratepayers through a rate adjustment4 7f7 ,sense of ,congress regarding additional rulemakings ,it is the sense of ,congress that-- 7#a7 following the issuance of the rule under subsection 7a71 the ,commission should revise such rule1 or issue additional rules under the authority of section #bai7;b77#c7 of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbds7b77#c771 as amended by section #b1 to expand the shared savings framework to additional categories of measurable1 demonstrable1 and verifiable covered transmission actions2 7#b7 any such rule should include a version of the methodologies developed under subsection 7b7 adapted for such additional categories2 and 7#c7 any such rule should take into account the findings of the most recently conducted study under section #f4 #d4 ,guidance for electric utilities not subject to ,federal ,energy ,regulatory ,commission jurisdiction 7a7 ,in general ,not later than two years after the date of enactment of this ,act1 the ,secretary1 in coordination with the ,commission and ,state regulatory authorities1 shall develop and publish on a publicly available website of the ,department of ,energy guidance to support ,state regulatory authorities in establishing frameworks under which covered electric utilities may recover a portion of verified cost savings attributable to a covered utility action as an incentive4 7b7 ,minimum elements ,the guidance under subsection 7a7 shall include-- 7#a7 guidance1 developed in accordance with subsection 7c71 for determining the baseline performance of a covered electric utility absent a covered utility action2 7#b7 guidance1 developed in accordance with subsection 7d71 for determining the cost savings attributable to a covered utility action2 7#c7 guidance for the measurement and verification of a covered utility action1 and any cost savings attributable to such action1 by an independent evaluator determined appropriate by the ,state regulatory authority concerned2 7#d7 guidance on potential mechanisms by which covered electric utilities may recover a portion of the verified cost savings attributable to a covered utility action1 including through the provision of rate adjustments by ,state regulatory authorities2 and 7#e7 such other elements as the ,secretary determines appropriate to ensure the framework specified in subsection 7a7 is transparent1 performance-based1 cost-effective1 and consistent with ,state ratemaking practices4 7c7 ,methodology for determining baseline performance 7#a7 ,in general ,in developing the guidance under subsection 7b77#a71 the ,secretary1 in coordination with the ,commission1 shall-- 7,a7 consult with ,state regulatory authorities1 ,independent ,system ,operators1 ,regional ,transmission ,organizations1 and independent evaluators determined appropriate by the ,secretary regarding such guidance2 7,b7 include in such guidance technical guidance for normalizing data to ensure the baseline performance of a covered electric utility accounts for variability in exogenous factors1 such as variability in-- 7i7 weather2 7ii7 demand over time2 7iii7 upgrades1 interconnections1 or operational changes made by other utilities1 ,independent ,system ,operators or ,regional ,transmission ,organizations1 or other entities determined relevant by the ,commission2 or 7iv7 other conditions affecting demand or generation1 as determined by the ,secretary2 and 7,c7 ensure such guidance supports consistent treatment across covered electric utilities within each category described in subsection 7e74 7#b7 ,support from ,national ,laboratories ,the ,national ,laboratories shall provide such technical support as the ,secretary determines necessary to carry out this subsection4 7d7 ,guidance on determining cost savings ,in developing the guidance under subsection 7b77#b71 the ,secretary shall-- 7#a7 include in such guidance-- 7,a7 principles to ensure that cost savings attributable to a covered utility action are calculated in a manner that takes into account price proxies for the value of electric energy and the baseline performance of the covered electric utility2 and 7,b7 tools1 technical support1 and reference data to assist ,state regulatory authorities in applying the principles specified in subparagraph 7,a72 and 7#b7 ensure such guidance supports consistent treatment across covered electric utilities within each category described in subsection 7e74 7e7 ,applicability to utility market structures ,in carrying out subsection 7a71 the ,secretary shall develop separate guidance for each category of covered electric utilities as follows3 7#a7 ,vertically integrated utilities4 7#b7 ,covered electric utilities that own or operate transmission infrastructure but not distribution or generation infrastructure4 7#c7 ,covered electric utilities that own or operate distribution infrastructure but not transmission or generation infrastructure4 7#d7 ,covered electric utilities that own or operate distribution and transmission infrastructure but not generation infrastructure4 7f7 ,revisions ,upon the publication of each report under section #f1 the ,secretary shall determine whether to revise the guidance under subsection 7a71 taking into account the contents of such report and the recommendations included therein4 #e4 ,grant program for ,state regulatory authorities 7a7 ,establishment ,not later than two years after the date of the enactment of this ,act1 the ,secretary shall establish a program under which the ,secretary may award grants to ,state regulatory authorities to support the development1 implementation1 and oversight by such ,state regulatory authorities of frameworks under which covered electric utilities may recover a portion of verified cost savings attributable to a covered utility action as an incentive 7in this section referred to as the grant program74 7b7 ,authorized uses of funds ,amounts awarded under the grant program may only be used to conduct the following activities3 7#a7 ,the development of a framework referred to in subsection 7a71 or revision of an existing such framework1 such that the framework is consistent with the guidance developed under section #d1 including the following3 7,a7 ,the development1 including the design or modeling1 of methodologies consistent with the methodologies set forth under such guidance4 7,b7 ,the development of data systems or other tools necessary for the development of the framework4 7,c7 ,the issuance or revision of regulations necessary for the development of the framework4 7,d7 ,the engagement with stakeholders with respect to the development of the framework4 7#b7 ,the implementation or oversight of a framework consistent with such guidance4 7c7 ,prohibited use of funds ,no amounts awarded under the grant program may be used to pay a covered electric utility4 7d7 ,grant recipient reporting requirement 7#a7 ,in general ,as a condition of receiving amounts under the grant program1 a ,state regulatory authority shall agree to submit to the ,secretary1 on an annual basis for the duration of the period in which such ,state regulatory authority expends such amounts1 a report describing the activities carried out using such amounts4 7#b7 ,effect of noncompliance ,if a grant recipient fails to submit a report required under paragraph 7#a71 such recipient shall be ineligible for additional awards under this section until the report is submitted4 7e7 ,administration of program 7#a7 ,technical support2 public registry ,in carrying out the grant program1 the ,secretary shall-- 7,a7 provide to grant recipients technical assistance in support of activities conducted using amounts awarded under the grant program2 and 7,b7 maintain a publicly accessible registry of the activities so conducted4 7#b7 ,reporting by ,secretary ,not later than two years after the date of enactment of this ,act1 and biennially thereafter for the duration of the grant program1 the ,secretary shall submit to the appropriate congressional committees a report containing-- 7,a7 a summary of the activities conducted using amounts awarded under the grant program2 7,b7 an assessment of the effectiveness of any framework implemented using such amounts2 and 7,c7 an identification of any barrier to the development1 implementation1 or oversight of a framework consistent with the guidance developed under section #d and recommendations for addressing such barrier1 as applicable4 7#c7 ,allocation of funds ,of the amounts authorized to be appropriated or otherwise made available to the ,secretary to carry out the grant program-- 7,a7 not more than #gj percent may be awarded for the conduct of activities under subsection 7b77#a72 7,b7 not less than #cj percent may be awarded for the conduct of activities under subsection 7b77#b72 and 7,c7 not more than five percent may be obligated or expended for ,federal administrative expenses4 #f4 ,studies on effects of certain rate treatments and alternative frameworks 7a7 ,studies required ,not later than three years after the date of enactment of this ,act1 and every five years thereafter1 the ,secretary1 in consultation with the ,commission1 shall-- 7#a7 conduct a study on-- 7,a7 inefficiencies in the electric power sector incentivized by existing rate treatments for the transmission of electric energy and any economic1 environmental1 or societal effect of such inefficiencies1 including with respect to the customers of electric utilities1 the reliable operation of the bulk-power system1 and the deployment of cost-effective grid-enhancing technologies2 and 7,b7 alternative frameworks for incentive-based1 including performance-based1 rate treatments for such transmission1 such as the alternative frameworks described in subsection 7b72 and 7#b7 publish on a publicly available website of the ,department of ,energy1 and submit to the appropriate congressional committees1 a report that includes-- 7,a7 a detailed description of the findings of such study2 and 7,b7 recommendations of the ,secretary to align rate treatments for the transmission of electric energy with the goals of lowering costs for the customers of electric utilities1 enhancing the reliable operation of the bulk-power system1 reducing transmission congestion and other inefficiencies in the transmission or delivery of electric energy1 and encouraging the deployment of cost-effective grid-enhancing technologies4 7b7 ,examples of alternative frameworks ,the alternative frameworks described in this subsection are the following3 7#a7 ,shared savings frameworks4 7#b7 ,revenue decoupling models1 under which authorized revenues of utilities are separated from volumetric sales of electricity to reduce disincentives for energy efficiency and programs to reduce the consumption of1 or peak demand for1 electric energy4 7#c7 ,return on equity adjustments1 under which authorized utility returns are increased or decreased based on measurable factors such as risk profile1 performance outcomes1 or efficiency improvements4 7#d7 ,multi-year rate plans1 under which revenue requirements and performance expectations for utilities are established for a fixed multi-year period rather than through single-year rate cases4 7#e7 ,earnings sharing mechanisms1 under which earnings of utilities falling outside an authorized range as compared to the return on equity are shared between shareholders and ratepayers4 7#f7 ,total expenditure models1 under which capital and operating expenditures of utilities are treated on an equivalent basis to reduce bias toward capital investment4 7#g7 ,performance scorecards1 under which utilities are evaluated against transparent outcome-based metrics such as reliability1 affordability1 equity1 or the reduction of emissions1 with results informing regulatory decisions or incentive adjustments4 7c7 ,sources ,the ,secretary shall ensure that each study under subsection 7a7 is informed by-- 7#a7 reports filed with the ,commission pursuant to sections #c and #e of this ,act and section #cjd of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbe;c72 7#b7 relevant reports issued by the ,national ,laboratories2 and 7#c7 such other studies1 reports1 and other data sources as the ,secretary may determine appropriate4 #g4 ,definitions ,in this ,act3 7#a7 ,advanced conductor ,the term advanced conductor means an electric transmission conductor that1 relative to a conductor being replaced on a given transmission or distribution line1 is designed to substantially improve electrical or mechanical performance through the achievement of at least one of the following criteria1 as determined by the ,commission3 7,a7 ,a substantial increase in current-carrying capacity under normal operating conditions4 7,b7 ,a substantial reduction in electrical resistance or line losses under normal operating conditions4 7,c7 ,operation at materially higher continuous allowable operating temperatures4 7,d7 ,a reduction in thermal sag or mechanical constraints that enables increased use of a transmission segment or facility4 7#b7 ,appropriate congressional committees ,the term appropriate congressional committees means-- 7,a7 the ,committee on ,energy and ,commerce of the ,house of ,representatives2 and 7,b7 the ,committee on ,energy and ,natural ,resources of the ,senate4 7#c7 ,bulk-power system2 electric utility2 ,independent ,system ,operator2 ,regional ,transmission ,organization2 ,state regulatory authority2 transmitting utility ,the terms bulk-power system1 electric utility1 ,independent ,system ,operator1 ,regional ,transmission ,organization1 ,state regulatory authority1 and transmitting utility have the meanings given such terms in section #c of the ,federal ,power ,act 7#af ,u4,s4,c4 #gif74 7#d7 ,commission ,the term ,commission means the ,federal ,energy ,regulatory ,commission4 7#e7 ,covered electric utility ,the term covered electric utility means an electric utility not subject to the jurisdiction of the ,commission for ratemaking purposes under ,part ,,ii of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbd et seq474 7#f7 ,covered action ,the term covered action-- 7,a7 means an action that would generate cost savings for ratepayers2 and 7,b7 does not include the construction of a new facility or the complete reconstruction of an existing facility4 7#g7 ,covered transmission action ,the term covered transmission action means a covered action to improve the efficiency1 capacity1 reliability1 or resilience of one or more transmission facilities or transmission segments1 including through-- 7,a7 the replacement of a conductor on a transmission line within such a facility or segment with an advanced conductor2 or 7,b7 the deployment of a grid-enhancing technology4 7#h7 ,covered transmitting utility ,the term covered transmitting utility means a transmitting utility subject to the jurisdiction of the ,commission for ratemaking purposes under part ,,ii of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbd et seq474 7#i7 ,covered utility action ,the term covered utility action means a covered action taken by an electric utility to-- 7,a7 improve the efficiency of the generation1 transmission1 or distribution of electric energy1 including by reducing the proportion of electrical energy lost during such generation1 transmission1 or distribution 7including through the deployment of energy storage systems or other technologies72 or 7,b7 reduce the consumption of1 or peak demand for1 electric energy1 including through-- 7i7 a technological improvement1 such as the deployment of high-efficiency appliances1 smart thermostats1 distributed energy resources1 or building retrofits2 7ii7 the establishment of a pricing mechanism to encourage customers of the electric utility to reduce such consumption or shift such demand to non-peak hours2 or 7iii7 any other action or program to incentivize or otherwise produce such a reduction or shift in demand4 7#aj7 ,grid-enhancing technology ,the term grid-enhancing technology means any hardware or software that-- 7,a7 increases the capacity1 efficiency1 reliability1 resilience1 or safety of transmission facilities and transmission technologies2 and 7,b7 is installed1 in addition to transmission facilities and transmission technologies1 for the purpose of-- 7i7 providing operators of such facilities and technologies increased situational awareness and control over the electric grid2 7ii7 improving the efficiency of such facilities and technologies2 7iii7 increasing the transfer capacity of such facilities and technologies2 or 7iv7 otherwise enabling the increased use1 or more efficient of use1 of such facilities and technologies under normal operating conditions4 7#aa7 ,qualifying action ,the term qualifying action means a covered transmission action achieved through the reduction of transmission physical losses4 7#ab7 ,secretary ,the term ,secretary means the ,secretary of ,energy4 7#ac7 ,similarly situated ,the term similarly situated1 with respect to transmission segments1 means transmission segments that the ,commission determines share comparable characteristics1 such as voltage class1 geography1 load profile1 or historical performance4 7#ad7 ,transmission physical loss ,the term transmission physical loss means the amount of electrical energy that enters a transmission segment but does not exit such transmission segment1 as measured over a prescribed period of time4 7#ae7 ,transmission segment ,the term transmission segment means a functionally distinct portion of an interconnected transmission system 7such as a single transmission line or multiple transmission lines within a prescribed zone1 such as between prescribed substations71 for which the amount of electrical energy transmitted and the amount of electrical energy lost during such transmission may be independently measured1 as determined by the ,commission4 7#af7 ,vertically integrated electric utility ,the term vertically integrated electric utility means a covered electric utility that-- 7,a7 owns and operates generation1 transmission1 and distribution facilities2 and 7,b7 directly provides retail electric service to end-use customers4